I thought that too but look at all the maze clones back then from a licensed Alien game to KC Munchkin (it was Atari that went after the publisher, not Namco, due to similarities) and many more.
At this point, I don't think Namco cared about the home market, they were squarely focused on the arcade market, seemingly happy to collect licensing fees for home ports. They got really into the home market with the NES's popularity though.
Good points. Atari really did do almost anything wrong that was humanly possible back then, didn't they?
They really did. I know many give them the benefit of the doubt since they were "new" and were trailblazing a new avenue of entertainment but I just can't give them that much. So many things they did were simply stupidity because even when shown how the industry was already changing, they simply buckled down on their B.S. thinking the industry would bend to them.